The embargo, which would need to be accepted by the 27- nation bloc’s foreign ministers on Jan. 23, is also likely to include an exemption for Italy, so crude can be sold to pay off debts to Rome-based Eni SpA (ENI), Italy’s largest oil company, according to the officials, who declined to be identified because the talks are private.

A ban on petrochemical products would start sooner, about three months after EU ministers agree to the measure, one official said yesterday. Once a decision is made, member states would be barred from concluding new oil contracts with Iran or renewing those that are due to expire, while existing deals will be terminated within six months, according to a second diplomat today. Long-term contracts constitute the bulk of Europe’s purchases of Iranian oil.

Phasing in the European embargo would satisfy the concern of nations most dependent on Iranian crude, including Italy, Greece and Spain, the first EU official said. Those three nations accounted for 68.5 percent of EU imports from Iran in 2010, according to European Commission data.

As Europe weighs its embargo, President Barack Obama’s administration has sent teams worldwide to consult with countries on managing the supply and demand of oil, according to an administration official who briefed reporters in Washington.

OPEC’s other members would be able to make up for a drop in Iranian oil supply if the EU agrees to an embargo, said Chakib Khelil, the group’s former president. Even so, prices may temporarily rally to as high as $200 a barrel on news of any such blockade, he said today in London.

“It should be possible to replace, at least, the European consumption of Iranian oil,” Khelil said in an interview with Mark Barton on Bloomberg Television’s “On the Move.” Obama's Arrogance Coupled With Economic Idiocy

Anone who thinks president Obama can manage the supply and demand of oil is a fool. Sending teams worldwide in an attempt to do that is not only the height of arrogance, it is economic idiocy

Phased In Oil Shock

Iran is OPEC's second largest oil producer. Bloomberg estimates that Iran pumped 3.58 million barrels of crude a day last month.

The idea that Iran's oil supply can easily be replaced is pure nonsense.

Phasing in an embargo is the same as phasing in higher prices smack in the midst of an already guaranteed monster European recession.

However, it's important to understand that Chinese "benefit" is an illusion, in isolation.

In aggregate, oil-dependent countries including China cannot conceivably benefit from an oil shock or higher oil prices because global trade will collapse. OPEC exporters may temporarily benefit from higher prices but the expense will be falling usage and a strengthening worldwide recession.

If one wonders why Iran may want nuclear weapons, the US and EU have certainly given Iran sufficient reasons.

How to Stop the Madness

This proposed embargo is economic idiocy as well as an act of war by the US and EU on Iran.

Once again I point out that President Obama has continued the inane policies of President Bush. Newt Gingrich and Mitt Romney would do the same.

If one wishes to end the economic and war-mongering madness, there is only one electable choice: Ron Paul.

Related

"The Saudis are preparing for Iran’s return," said Mohamed Sadegh Memarian, who recently retired as the head of petroleum market analysis at Iran’s oil ministry, as they sharply cut the prices they charge for crude oil in Europe (to the biggest discount since Feb 2009). The move that will likely undercut Iran happens as sectarian tensions escalate between the rival Middle Eastern nations.

U.S. oil companies are unlikely to rush into Iran anytime soon, even if Tehran secures a deal with global powers this summer regarding its nuclear program, according to analysts.
Iran’s ability to export crude oil has been severely curtailed due to tough sanctions by global powers, but a deal is within reach on its nuclear enrichment program with the so-called P5+1 nations, namely the United States, China, Russia, France and the United Kingdom and Germany. On Tuesday, negotiators pushed a deal date to July 7 to iron out differences.

Inquiring minds are tired of the spotlight on Greece (believe me I am as sick as anyone of Groundhog Day).
Given the world will not end when Greece defaults, whether in March of this year or next, let's turn our attention to a country far more significant.
Chinese Electricity Consumption Fell Massively In January

Tehran (AFP) - Iran is seeking $25 billion in investments from 50 deals involving international oil and gas companies, foreign executives were told Saturday in Tehran as the government outlined new contractual terms.

The tempting taboo of Iran’s oil and gas riches has moved a step nearer for Western oil companies, lining up to woo Tehran if sanctions finally succumb to a diplomatic thaw.
U.S. oil firms – barred by Washington from Iran for nearly two decades – planned to meet Oil Minister Bijan Zanganeh last week at the United Nations, encouraged by the new tone in Tehran, industry sources said.

Submitted by John C.K. Daly of OilPrice.com Despite Sanctions, Iran's Economy Limps Along In the 20th century, upright moral nations developed a new method of showing international opprobrium to rogue nations, the implantation of economic sanctions, designed to modify a recalcitrant nation’s behavior to accommodate international political mores.

The US' complete ineptitude on oil policy is in the spotlight just as predicted. A pair of articles will show what I mean.
China Snubs Geithner on Iran Oil
Bloomberg reports China Snubs Geithner on Iran Oil, Japan Plans Cut

SINGAPORE/SEOUL — South Korea’s Samsung Total Petrochemicals Co has revived a contract to buy Iranian oil after a year’s hiatus, as thin margins in plastics make the cheap fuel from Iran hard to resist, people familiar with the deal said on Friday.
Stringent U.S. and European sanctions aimed at reducing Iran’s oil income and forcing Tehran to curb its nuclear programme have made shipping and paying for the oil hard, halving the Islamic Republic’s crude exports.